Even then, the analysis suggests there is just a 50 per cent chance of a real house price rise relative to 2007, when prices reached their peak.  Over the next four years there is only a 12 per cent chance that real house prices will have risen back above their 2007 peak, according to PwC's analysis. In fact the median projection over the period until 2015 is for a 12 per cent real decline.

There is further depressing property news in the Rics June 2011 UK Housing Market Survey published today. It reports that the housing market faced a stalemate during June, as demand failed to pick up and supply of new property fell back.

Rics' housing spokesman Alan Collett said: "The housing market was pretty flat during June. Buyer interest in purchasing property remains relatively low across much of the UK while the volume of new stock which is coming to the market has slackened. With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue."

The picture is going to get worse before it shows any sign of recovery, warned John Hawksworth, the chief economist at PwC. "We expect average UK house prices to drift down further over the next year and then enjoy only a modest recovery over the next few years," he said.

"This reflects the dampening impact of declining real income levels and continued tight credit conditions for first-time buyers in particular." Mr Hawksworth added that there would be a "long, slow road to recovery".

"Later in the decade, we expect stronger house price growth as supply shortages reassert themselves and credit availability gradually returns to more normal levels," he said. The Rics figures for June show that the property market in London continues to buck the downward trend.

"London remains a market apart with both sales and prices showing a greater degree of resilience," Mr Collett said.

The capital and the South-east will lead the economic recovery, according to PwC. "The UK as a whole faces a slow climb to recovery given the continued squeeze on consumer and government spending," Mr Hawksworth said. "But we see a distinct regional pattern to growth with the public spending cuts acting as a drag on recovery in Northern Ireland, Scotland, Wales and the North-east in particular."

He said London and the South-east is not be immune to the cuts, but growth there is less dependent on the public sector and more on the international financial and business services sector, in which growth is likely to remain relatively strong.

However, there was some relatively positive news for the property sector yesterday as new data from the Council of Mortgage Lenders showed a rise in loans for house purchase and remortgaging. Figures for May showed more signs of stabilisation in the mortgage market, according to the CML.